Should Restaurants Ready to Grow Launch Crowdfunding Campaigns

 

Crowdfunding is a way of raising money from a large number of people who each contribute a small amount, usually through an online platform. Crowdfunding can be used for various purposes, such as launching a new product, supporting a social cause, or expanding a business. We asked our Grocerant Guru®, Steven Johnson of Tacoma, WA based Foodservice Solutions® to explore in this article, why restaurants that are ready to grow should consider launching crowdfunding campaigns, and what are the benefits and challenges of doing so.

Benefits of Crowdfunding for Restaurants

Crowdfunding can offer several advantages for restaurants that want to grow their business, such as:

·         Access to capital: Crowdfunding can help restaurants overcome the barriers of traditional financing, such as high interest rates, strict eligibility criteria, or long approval processes. Crowdfunding can provide a faster and easier way to raise funds, especially for restaurants that have a loyal customer base, a strong online presence, or a unique value proposition.

·         Customer engagement: Crowdfunding can help restaurants build stronger relationships with their customers, by allowing them to become investors, supporters, or advocates of their business. Crowdfunding can also help restaurants gain valuable feedback, insights, and suggestions from their customers, which can help them improve their products, services, or operations.

·         Brand awareness: Crowdfunding can help restaurants increase their visibility and reach, by exposing their business to a wider audience, both online and offline. Crowdfunding can also help restaurants generate buzz, word-of-mouth, and media attention, which can boost their reputation and credibility.

·         Innovation: Crowdfunding can help restaurants test new ideas, experiment with new concepts, or launch new products, without risking too much capital or resources. Crowdfunding can also help restaurants tap into the creativity and expertise of their customers, who can offer new perspectives, solutions, or opportunities.

Challenges of Crowdfunding for Restaurants

Crowdfunding is not a magic bullet, and it also comes with some challenges and risks, such as:

·         Competition: Crowdfunding is a crowded and competitive space, with thousands of projects vying for attention and funding. Restaurants need to stand out from the crowd, by offering a compelling story, a clear goal, and a strong value proposition. Restaurants also need to market their campaign effectively, by using various channels, such as social media, email, or events, to reach and attract potential backers.

·         Commitment: Crowdfunding requires a lot of time, effort, and dedication, both before and after the campaign. Restaurants need to plan and prepare their campaign carefully, by setting a realistic budget, timeline, and rewards. Restaurants also need to manage and communicate with their backers regularly, by providing updates, answering questions, and delivering rewards. Restaurants also need to fulfill their promises, by using the funds wisely, achieving their goals, and reporting their results.

·         Regulation: Crowdfunding is subject to different laws and regulations, depending on the type, location, and scope of the campaign. Restaurants need to comply with the legal and ethical standards of crowdfunding, such as disclosing their financial information, protecting their intellectual property, and paying taxes. Restaurants also need to be aware of the potential liabilities and disputes that may arise from crowdfunding, such as fraud, breach of contract, or infringement.

Think About This:

Crowdfunding can be a viable and beneficial option for restaurants that are ready to grow their business, as it can provide them with access to capital, customer engagement, brand awareness, and innovation. However, crowdfunding also entails some challenges and risks, such as competition, commitment, and regulation, that restaurants need to consider and address. Therefore, restaurants should weigh the pros and cons of crowdfunding, and decide whether it is the right fit for their business goals, needs, and capabilities.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation, and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter